Acme United (ACU – $10.51) entered into a new loan agreement with HSBC Bank to replace the revolving loan it had with Wells Fargo Bank.
The new five-year facility provides for borrowings up to $30 million (an increase of $10 million) at an interest rate of LIBOR plus 1.75% (a decrease of 25 basis points). At today’s interest rates that means the Company will pay a little over 2 percent interest on it borrowings. The agreement expires on March 31, 2017.
The Company especially opted for a new loan facility with HSBC Bank because of the bank’s international presence and know-how of global markets.
Acme’s current debt is around $17 million. So the money from the new loan, together with $7 million in cash, which the Company currently has, leaves plenty of room to fund growth, pay dividends, buy back shares and finance potential acquisitions.
Wells Fargo Bank
|Amount||Max. $20 million||Max. $30 million|
|Interest Rate||LIBOR + 2%||LIBOR + 1.75%|
|Term||3 years||5 years||
Comparison between the terms of the old loan agreement with Wells Fargo Bank and the new loan agreement with HSBC Bank.
On Monday, we’ll publish a new audio interview with Walter C. Johnsen, Chairman and CEO of Acme United.
We’ll ask for Mr. Johnsen’s feelings about the first quarter, which ended March 31st and we’ll try to find out if the Company remains on track to reach its revenue goal for 2012 of between 80 and 85 million. We’ll also enquire about Acme’s growth prospects and the ability to handle that growth.
Make sure you don’t miss it.
|Smallcaps.us Advice: Buy||Price Target: $21.55||Latest Company Report (pdf)|
|Disclosure: Smallcaps.us is a consultant for Acme United Corporation. Any and all compensation received from companies is mentioned in our disclaimer.|